Dear Fellow Mustachians,
My wife and I are considering a home purchase and wish to remain closer to work for obvious reasons. However, home prices are pricey in the area and to benefit from a significant decrease (150-200k) we would have to travel an extra 40 minutes EACH way on a daily basis.
We are in one of the most expensive areas in Canada (Greater Toronto Area) after Vancouver etc...
Yes, we could continue renting but we came across a very interesting situation. Would you consider purchasing a relatively expensive home 650k which has been remodeled from top to bottom in a good neighborhood that comes with a rental unit that could easily cover 1/3 of the cost of the mortgage payment.
I.e. 650k at 3% for 25 yrs = 3000$ a month
Minus 2 bedroom unit (high end) that could be rented. For approx 1000$ without utils.
Leaving me with a 2000$ a mth mortgage that is equivalent to a 400k home with 3bed, 3 bath, 1500-1800sq ft, great yard, steps to a cute downtown area, 10km from work...
My financials:
Combined income: 150k + , two pensions plans (teachers in Canada) , one rental unit (60k equity) netting 200$ a month, 45K in cash, 8k in registered funds, no debts, investing approx 30-40% of income monthly.
Our other option is to buy a home in the 400-500$ without rental unit with a larger down payment .
Thoughts???
A) commute and save 150-200k on home but travel close to 2hrs a day for work
B) buy home with rental income
C) buy later a home that will end up costing the same as option B but without the tenant